The Lake County Board of County Commissioners met in special session on Tuesday, June 8, 1993, at 9:00 a.m., in the Board of County Commissioner's Meeting Room, Lake County Administration Building, Tavares, Florida. Commissioners present at the meeting were: G. Richard Swartz, Jr., Chairman; Catherine Hanson, Vice Chairman; Rhonda H. Gerber; Don Bailey; and Welton G. Cadwell. Others present were: Annette Star Lustgarten, County Attorney; Peter F. Wahl, County Manager; Ava Kronz, BCC Office Manager; Barbara Lehman, Chief Deputy, Finance & Audit Department; and Sandra Carter, Deputy Clerk.
Commr. Bailey gave the Invocation and led the Pledge of Allegiance.
Ms. Annette Star Lustgarten, County Attorney, explained this request, stating that approval of same was required in order for the County to submit an application for Community Development Block Grant funds. She stated that it prohibits discrimination in housing in Lake County and gives the Board of County Commissioners the authority to hear complaints that may arise, based on alleged discrimination. She stated that it also gives them the authority to create a board to hear those complaints, make findings of fact, and reach conclusions of law, or the authority to appoint a hearing officer to do so. She stated that, if the Board of County Commissioners wished to go forward with such a board, she would draft a resolution creating it and its membership.
The Chairman opened the public hearing.
Discussion occurred regarding the ordinance, at which time it was determined that the Board of County Commissioners could decide the makeup of such a board and whether they would hear the cases (which she noted would be similar to quasi-judicial hearings), or whether they would appoint a hearing officer to do so, at a later
date. She stated that the request before them, this date, was only for approval of the ordinance.
Commr. Hanson questioned whether the board alluded to by the County Attorney and the Affordable Housing Advisory Committee could be combined, however, was informed by the County Attorney that they could not.
Commr. Cadwell suggested going with a hearing officer, rather than another board, noting that he felt a hearing officer would work and that it would make it less cumbersome for everyone involved, to which Commr. Hanson concurred.
There being no one present in opposition to the request, the Chairman closed the public hearing.
A motion was made by Commr. Hanson and seconded by Commr. Cadwell to approve Ordinance No. 1993-10 (Lake County Fair Housing Ordinance), as requested by the County Attorney, Ms. Lustgarten, as follows:
AN ORDINANCE OF THE BOARD OF COUNTY COMMISSIONERS OF
LAKE COUNTY, FLORIDA, DECLARING IT TO BE THE POLICY
OF LAKE COUNTY, FLORIDA, TO ELIMINATE DISCRIMINATION
IN HOUSING BASED UPON RACE, COLOR, RELIGION, SEX,
FAMILIAL STATUS, HANDICAP, OR NATIONAL ORIGIN; PROVIDING
FOR THE TITLE "LAKE COUNTY FAIR HOUSING ORDINANCE";
PROVIDING A DECLARATION OF POLICY; PROVIDING FOR
DEFINITIONS; PROVIDING FOR EXEMPTIONS; PROVIDING FOR
UNLAWFUL ACTS OF DISCRIMINATION IN THE SALE OR RENTAL
OF HOUSING; PROVIDING FOR UNLAW ACTS OF DISCRIMINATION
OF BROKERAGE SERVICE; PROVIDING FOR THE ADMINISTRATION
OF THE ORDINANCE; PROVIDING FOR PROCEDURES FOR INITIATING
AND ACTING UPON COMPLAINTS; PROVIDING FOR HEARINGS;
PROVIDING FOR REMEDIES; PROVIDING FOR PROCEDURES FOR
FILING REPORTS WITH THE REAL ESTATE COMMISSION OF THE
STATE OF FLORIDA; PROVIDING FOR SEVERABILITY; PROVIDING
FOR A PENALTY; PROVIDING FOR INCLUSION IN THE CODE; AND PROVIDING FOR AN EFFECTIVE DATE.
Under discussion, Commr. Swartz stated that, if the Board decided to go with a hearing officer, he would request the County Attorney to contact some other jurisdictions and see what costs would be involved with having a hearing officer.
The Chairman called for a vote on the motion, which was carried unanimously.
COMMUNITY SERVICES/GRANTS/PLANNING & DEVELOPMENT SERVICES
The Chairman explained this request and opened the public hearing.
There being no one present in opposition to the request, the Chairman closed the public hearing.
On a motion by Commr. Hanson, seconded by Commr. Bailey and carried unanimously, the Board approved a request for authorization to submit an application to the Florida Department of Community Affairs, for the Small Cities Community Development Block Grant, as requested by Planning & Development Services.
COUNTY MANAGER'S DEPARTMENTAL BUSINESS
PLANNING & DEVELOPMENT SERVICES/RESOLUTIONS
Mr. Pete Wahl, County Manager, explained this request.
No one was present in opposition to the request.
On a motion by Commr. Bailey, seconded by Commr. Gerber and carried unanimously, the Board approved Resolution No. 1993-98, appointing the Director of the Office of Facilities and Capital Improvements as the official Section 504 Coordinator for Lake County and adopting a Transition Plan, based on the Evaluation Plan, as completed, to date, by the Office of Facilities and Capital Improvements, as requested by Planning & Development Services.
Commr. Hanson explained this request.
No one was present in opposition to the request.
On a motion by Commr. Hanson, seconded by Commr. Bailey and carried unanimously, the Board approved Resolution No. 1993-99, petitioning the Public Service Commission for an extended service area to include the exchanges within the Deland area for residents
in the Forest Hills and Pine Lakes areas, as requested by Commr. Hanson.
Commr. Hanson explained this request.
No one was present in opposition to the request.
On a motion by Commr. Hanson, seconded by Commr. Cadwell and carried unanimously, the Board appointed Mr. Hosea Walls to the Animal Control Ordinance Study Committee, representing the Business Community position, as requested by Commr. Hanson.
COMMITTEES/LAWS & LEGISLATION
Commr. Hanson brought the Board up-to-date concerning the issue of the Blue Belt Amendment, noting that the Agriculture Committee is looking into the matter and has requested the Soil Conservation Service to give input on its true impact to the County, with regard to what properties would be affected and how it will affect taxes. She stated that she will further update the Board at a later date.
No action was needed or taken at this time.
RECESS & REASSEMBLY
At 9:15 a.m., the Chairman announced that the Board would recess until 9:30 a.m., for a public hearing to discuss the solid waste issue.
The Chairman opened the public hearing stating that the meeting would begin with an analysis of the tentative budget and discussion regarding some variables, which range from the method by which the Board should adopt collection of the rates, to the amount of the rates, to whether or not the County should change the bond financing structure that it currently has.
Mr. Pete Wahl, County Manager, stated that there were two issues that the Board really needed to address this date, being (1)
issue of whether or not to refinance the bonds and (2) the issue of the cost of disposal.
Commr. Swartz submitted, for the record, a letter from Mr. Dean Simeral, a resident of Leesburg, pertaining to the solid waste issue, noting that Mr. Simeral had requested that he do so, due to the fact that he was unable to stay for this portion of the meeting.
Mr. Jim Stivender, Jr., Director of Public Services, appeared before the Board and briefly discussed the leachate management issue. He stated that the County has hauled 700,000 gallons of leachate from the ash monofil, to date, and that there is much more left to be hauled away; however, noted that the County is receiving a relatively good rate for the leachate, of approximately $40.00 per 1,000 gallons. Regarding the issue of a Request for Proposal (RFP) for the Lady Lake closure, he stated that it has gone through the process and will be coming back to the Board, for review, at a later date.
Mr. Stivender stated that the Astatula Landfill expansion is under way, noting that excavation of the hole has begun and the liner is being put out to bid this month. He stated that the RFP for the closure permit for Astatula I has been awarded, negotiated, and is under way at this time. He stated that the appraisals for the purchase of land will be at the end of this month and that the environmental assessment has been made. He stated that some maps will be provided to the Board, at a later date, to show what properties are available, noting that staff has added one additional 40 acre tract to the negotiations. He stated that Site K, which was originally in the November proposal, would not be in the proposal before the Board this date.
Mr. Ron Roche, Director, Solid Waste Management Division, appeared before the Board stating that he would be reviewing some of the County's capital needs, noting that a lot of them are presently under way. He stated that the County is required by the
Department of Environmental Regulation (DER) and by State Statute to have funding to close landfills and to provide long-term care for those closed landfills. He reviewed several overheads with the Board, noting that Astatula I is the site that is currently under closure. He stated that Astatula II is the expansion area that the County is currently in, noting that the County is seeking to purchase two parcels of property, one of which will be used for on site stormwater retention, which will give the County more landfill space. He stated that that is how the County has been able to eliminate Site K. He reviewed overheads showing the various phases of the Astatula site project and answered questions from the Board regarding same.
Mr. Roche stated that staff looked at how to fund the project and prepared the following scenarios, which he reviewed with the Board:
Scenario I funded all capital needs from bonds for the first three year period and for the out years additional bond issues.
Scenario II looked at funding immediate capital needs from bonds and for those out years (beyond the three year period) would fund through a reservation of disposal fees.
Scenario III looked at funding capital needs from bonds limiting use of infrastructure tax monies and use of disposal fees for the out year fundings.
Scenario IV (he noted there were three subscenarios, a, b and c) funds the immediate capital needs with contributions and borrowing from the infrastructure tax and disposal fees for the out years.
Mr. Roche discussed how the issue of borrowing from the infrastructure would work, at which time he reviewed a chart contained in a booklet prepared by staff, for the Board, in their backup material, under Tab 8, listing matters of immediate need to the County during the next three years. He stated that staff has been informed by the County Attorney that there are certain costs
involved that infrastructure tax monies can be used for and certain costs that they cannot be used for. He stated that for those monies that cannot be used for solid waste, staff has planned to borrow same from the infrastructure tax and pay it back from solid waste disposal fees. He stated that, since this would not be a normal bond issue, the County would not need the three years covered, therefore, could do one year at a time and reduce the amount of the initial borrowing for next year.
Ms. R. Belle Ward, questioned (from the audience) whether the cities would be charged a separate fee, to which Commr. Swartz responded that the cities will pay a share of the costs through some system which the Board will discuss and adopt at a later time.
Mr. Roche discussed the various scenarios, noting the differences in each. He then reviewed a Tipping Fee Analysis chart, contained in the booklet alluded to earlier, in the Board's backup material, under Tab 6, noting that if the Board bonded now and then waited until later to bond each of the out years, even though the County may have started off lower, it would soon be higher in its tipping fee.
It was noted that Scenario V had been eliminated, as an option, and that Scenarios IV (a), (b), and (c) were variations of Scenario V.
Mr. Roche then reviewed and discussed, at length, the Scenario Rate Summary chart contained in the booklet alluded to earlier, under Tab 7, which indicates two methods in which allocations can be done. He noted that the top portion of the chart gives the tipping fee for each scenario, from a high of $94.66 to a low of $71.86. He stated that the chart also shows the cost for collection, on a monthly basis, to a single family curb-side rate payer, being $8.66 and shows the disposal fee ranging from $7.24 to a low of $5.44.
Commr. Swartz stated that the figure of $8.66 pertains to those individuals in the unincorporated areas who individually
contract with a hauler and get a bill each quarter, as opposed to those who may live in a community where that community collectively bids or negotiates a price.
Mr. Roche interjected that the individuals alluded to by Commr. Swartz are currently paying from $204.00 to $240.00 per year for that service.
Mr. Steve Hiney, Recycling Coordinator, reviewed a chart contained in the booklet alluded to earlier, in the Board's backup material, which he noted compares the same scenario (Scenario IV.c), based on the two methods of allocating disposal costs - a generation basis and a per unit basis (a somewhat similar method). He then answered questions from the Board regarding same.
Commr. Swartz stated that no matter which one of the methods might be chosen, it will be based on estimates, however, pointed out the fact that neither of the methods is based on the County staying the way that it presently is.
Commr. Swartz stated that the figures given in the chart that Mr. Hiney was reviewing were not the ones that he wanted to see. He requested Mr. Hiney to make some changes in the chart and bring it back, for review, later in the meeting.
At this time, Commr. Swartz introduced to those present members of the Lake County Ad Hoc Financing Advisory Committee and members of the Lake County Solid Waste Advisory Committee, who were present in the audience.
Mr. Rick Patterson, Public Financial Management, Inc. (PFM), appeared before the Board to discuss a request that was made that he look at options, with regard to the $79 million in bonds that are outstanding, concerning the waste-to-energy facility, which he noted is part of the County's service contract. He stated that, at the Board Meeting of May 18, 1993, PFM presented the findings and recommendations of the County's Ad Hoc Financing Advisory Committee, noting that they had voted 4-1 for the County to proceed
to fix the rate on the approximately $79 million in variable debt that was issued to finance the waste-to-energy facility.
Mr. Patterson stated that several reasons were given, in reaching that recommendation, being (1) that long-term interest rates were at their lowest point in over 20 years and the Committee felt that it made sense to lock into those rates at this time; (2) that fixing the rates would take the County out of the risk playing game, where the rate payers would be subject to changes in the variable rates; (3) that locking into fixed rates would allow the County to lock into a predictable debt service pattern and structure debt service in a way that gradual increases would be experienced in the first few years, and then the overall debt service pattern could be stabilized after that point; and (4) the Committee believes that future borrowing can be accomplished at a more cost effective manner by locking into these rates, because locking into fixed rates would address some of the concerns of the insurers and rating agencies.
Mr. Patterson stated that PFM suggests, if the County does want to proceed with locking into rates, that the Board should develop some financing parameters to give them some idea of whether or not those parameters can be satisfied. He stated that, while the bonds are in the variable rate mode, it is necessary that they be supported by a Letter of Credit, which he noted is provided by National Westminster Bank. He stated that the Letter of Credit is set to expire on November 10, 1993. He stated that, if the County has not converted to a fixed rate by that time, a new Letter of Credit will need to be obtained, no later than November 10, 1993, for this deal to stay active and in the market. He stated that, if for any reason the County is not able to obtain a new Letter of Credit, that debt will be accelerated at a significant cost to the rate payers. He stated that PFM's primary directive in coming back before the Board, this date, was to develop those financing parameters and discuss them with the Board.
Mr. Patterson stated that, after the meeting on May 10, 1993, he spoke individually with several members of the Ad Hoc Financing Advisory Committee and they expressed a concern that, in the discussion with the Board concerning their recommendation, PFM had not driven home the point that one of the main reasons behind their recommendation was the variable nature of variable rates, and that PFM, by projecting a smooth predictable pattern in variable rates over the next 20 years, may not have accurately shown their concern. He stated that PFM had attempted to revise that projection, this date, to give the Board some idea about how variable variable rates can be. at which time he reviewed, page by page, a booklet that PFM had prepared and distributed to the Board regarding the recommended financing parameters for the bonds.
Mr. Patterson stated that Commrs. Bailey and Hanson had questioned, at the last Board Meeting, how variable variable rates have been and how much they have moved, from year to year. He stated that, in answer to that question, PFM assumes that the average rate will be 2.90%. He stated that, up to this point, the County has paid approximately 2% to 2.25%. He stated that current rates, based on information provided by PaineWebber, who he noted would become the County's new remarketing agent in July of this year, would be approximately 2.60%, however, noted that they assumed 2.90%, because they had seen in the market recently some increases in the short term rate.
Mr. Patterson stated that 2.90% is the lowest rate that the County will experience during this time frame, certainly the lowest that the County has experienced since 1988, when the bonds were issued. He stated that one of the Committee's real concerns is that significant increases and decreases can be experienced by staying in the variable rate mode, which would make it very difficult for the Board and staff to budget tipping fees from year to year. He stated that most counties like to see a fixed rate structure, where there are gradual increases, so the County can,
over time, raise tipping fees, but not have to do so in a real drastic fashion.
Mr. Patterson stated that, in looking at the difference between debt service in year one, resulting from variable to fixed rate, PFM has assumed, rather than a 7% rate, a rate of approximately 6.60% on the fixed rate financing and has also assumed, in the first year, where the County is required to pay $1.8 million on the taxable debt, that the County defer that payment and spread it over future years, when there will be more users of the system. He stated that, by doing so, right off the bat, the County would avoid a $l,800,000 hit. He stated they also considered some different Letter of Credit assumptions.
Mr. Patterson stated that PFM shows, in year one, based on current market conditions, that converting from variable to fixed rate would cost the County 72 cents per year in tipping fees, or 6 cents per month. He stated that PFM would recommend that the County develop a parameter where the maximum increase would be $2.50 per ton, however, the Board could target a number less than that. He stated that PFM's rational for looking at $2.50 per ton was assuming that the true interest cost on the borrowing increases from 6.66% (present assumption) to 7%, maximum, which he noted is a number that was kicked around by the Ad Hoc Financing Advisory Committee but never formally recommended.
Mr. Patterson stated that PFM projects tipping fees, for the first five years, under current market conditions, would not increase over the variable rate scenario by more than $1.52 per year. He referred to a chart on Page 10 of the booklet alluded to earlier, from PFM, contained in the Board's backup material, under Tab 1, noting that the far right column of said chart shows the maximum cost or savings per ton associated with this structure. He stated that the savings projection of $31.51, given for the year 2013, is a result of not incorporating a bullet payment into the final year, as was done with the original bonds. He stated that
the highest the County would see tipping fees increase, under the variable rate scenario, under this type of analysis, would be approximately $7 per ton, which he noted would occur in 8 years and that the highest average savings would occur in the final year, at $9.18 per ton.
Mr. Patterson referred to Page 7 of the booklet, where PFM recommends financing parameters, stating that under the current structure the principal is significantly backed loaded. He stated that the average life of the bonds weighted average maturity is 16.5 years, therefore, PFM would recommend that the County not exceed that and shift the burden to future users anymore than what has been done under the current issue. He stated that this structure results in a projected savings over 20 years of $17.3 million to the rate payers, noting that on a present value basis, that is approximately $3.7 million, in terms of average debt service savings, per ton, to savings to the users of approximately $3.60 per ton. He stated that the parameters are pretty clear, noting that they had looked at, in each case, setting the parameter at where it would be, assuming the 7% TIC (true interest costs).
Mr. Patterson stated that the gross savings, under that scenario, would be $13.5 million, over 20 years; the present value savings would be slightly over $1,250,000; and the average savings, per ton, would be $2.75, over the planning period. He stated that, PFM believes the County has made real significant strides in the last couple of years, in improving the credit and stability of the solid waste system. He stated that locking in fixed rates, at this time, would be a natural progression and another method of locking in the stability. He stated that the Board may want to do so now, or they may wish to do so in the future. He stated that PFM's recommendation would be that they consider doing it now, because they know what the present fixed rates are, but, do not know what they will be next year or in future years. He reiterated the fact that, by locking into the rates now, the County would be locking
into fixed rates that are at their lowest point in over 20 years, which is very important to the Committee.
Mr. Patterson stated that, in terms of timing, it has been suggested by others, including Mr. Eastwood (the dissenting member of the Ad Hoc Financing Advisory Committee) that rather than locking into fixed rates now, that the County continue to take advantage of variable rates for another year or two and not convert to fixed rates until they start to increase. He stated that PFM understands the rationale for that recommendation, but sees some potential problems with it, therefore, takes a different approach to it. He stated that once the Board makes the decision to go ahead, the County would be looking at an average of 35 basis points movement in the market, from start to finish, which would result in an increase in the debt service to the County of approximately $4 million.
Mr. Patterson stated that there were other reasons besides looking at actual debt service that the County would pay, under this scenario, for the Committee's recommendation to convert to a fixed rate. He stated that they had to do with future stability in the County's tipping fees and the ability to lock into attractive rates now, so that the County will know what its exposure is going to be in the future. He stated that, by fixing the rates now, the County can preserve a lower borrowing cost for future financings, because of concerns that were pointed out earlier, that the rating agencies and insurers have. He stated that, regardless of which direction the Board goes in, November 10, 1993, is a very real and fast deadline and PFM's concern, in making a decision and moving forward, is that they not be put in a position where the County determines too late in the game to convert to fixed rates. He stated that if the County does not do so, prior to November 10, 1993, the County will have to renegotiate a Letter of Credit and the County's existing bank has indicated that their up front fees for that type of conversion, or extension of the Letter of Credit,
would be over $350,000. He stated that the County can expect the consultant's fees to be another $200,000; therefore, the County would be looking at over $500,000 associated with extending the Letter of Credit, so PFM would recommend that the County not do that, unless they really feel that they need the Letter of Credit to be in place. Also, they would not want the County to make a decision too late to take advantage of current rates, or to get the fixed rate financing in place.
Mr. Patterson stated that, if the Board wished not to proceed with the fixed rate financing this year and would like to defer it to future budget years, that they let PFM know that now. He stated that PFM will then spend 100% of their time negotiating with Letter of Credit bank providers, to provide the County with the best overall deal, and will not split their time between working part-time toward fixing the rates and part-time toward staying in the variable rates.
RECESS & REASSEMBLY
At 10:50 a.m., the Chairman announced that the Board would recess for 10 minutes.
PUBLIC HEARING (CONT'D.)
A brief discussion occurred regarding what interest rate the Board is presently paying, under the variable rate, and what the average rate would be, under the fixed rate, as well as costs associated with converting the bonds to a fixed rate, at which time Mr. Patterson stated that, if the Board could safely assume that rates in the next 20 years will be similar to the last 20 years, then a fixed rate financing is cheaper than a variable rate financing to the disposal fee payers, over 20 years, and that savings in debt service translates into a lower tipping fee assessment.
Commr. Swartz questioned whether Mr. Patterson felt that the figures presented to the Board, by staff, particularly in Scenario
IV, which he noted shows 3.5%, 5.25%, and 7%, reasonably reflect what the County's debt service costs would be, to which Mr. Patterson responded that there are some significant differences between staff's projection of under 7% and PFM's projection of under 6.66%, in terms of an impact on a per ton basis.
At this time, Commr. Swartz asked Ms. Barbara Lehman, Chief Deputy Clerk, County Finance & Audits, for the Clerk of Circuit Court, to comment, noting that she had submitted a memorandum to the Board, through Mr. Watkins, dealing with this issue.
Ms. Lehman stated that the purpose of her writing the memorandum that Commr. Swartz alluded to was to point out financial conditions of the Landfill Enterprise Fund, due to the fact that the County is considering the advantages and disadvantages of converting to a fixed rate on the bonds. She stated that, at the present time, the County is enjoying a low variable rate and is paying approximately $22.00 per ton in debt service. She stated that, at the end of last year, said fund had a deficit in Retained Earnings of $2.5 million, but that action had been taken to resolve that, which was to increase the tipping fee to approximately $4.00 per ton and to pass a special assessment of $74.00 per year.
Ms. Lehman stated that there has been some improvement in the payments from the cities, which is helping to get the fund into a positive basis. She stated that this fund is not like any other governmental fund, it is run just like a business. She stated that, if there is a net loss from year to year, the County has to do something about it. She pointed out the fact that, if the County goes to a fixed rate, it will increase the tipping fees to cover the increase in debt service, in addition to any increase that the County might have to make to cover just the operating costs of the fund.
Ms. Lehman stated that this year the fund is looking a little better noting that, as of April 30, 1993, the revenue was $5.7 million and expenses $4.6 million, so the fund has a positive
income of approximately $1 million. She noted, however, that that does not include any depreciation expense which has to be charged to the fund, plus any change in the closing costs that might be incurred, so it is possible that this fund could show a loss again for 1993. She stated that the fund needs to be brought into a break even status and, if the County can take advantage of the variable rate for the next two years, on an extension of the Letter of Credit, if the County can get same for a reasonable amount, she feels that that would save money and improve the conditions of the fund. But, if it is not possible to do so, because the County cannot get the Letter of Credit, then she feels that going to a fixed rate is another option.
Ms. Lehman stated that, if it is possible for the County to stay in a variable rate mode and still have a Letter of Credit, it would be a good idea to do so, as it would help the fund.
Commr. Hanson questioned whether Ms. Lehman had studied an impact fee trend for the interest rate, to which Ms. Lehman responded that she had looked into what the U.S. Treasury was doing at the present time and its effect on long-term rates and noted that they had taken some action recently that would indicate that they feel the variable rates will stay in place a little longer than what was originally thought. She stated that it is really hard to say what might happen, noting that that is the whole issue.
Commr. Swartz stated that what Ms. Lehman stated was consistent with what the Board had heard at a previous meeting. He stated that she was saying short-term rates did trend up and now there is some belief that they might stay pretty much in the range, but, at the same time, long-term rates have been coming down and questioned Mr. Patterson regarding the matter, to which Mr. Patterson responded, stating that, in recent months, there has been an overall increase in long-term rates. He stated that, in comparing rates at current levels, he found long-term rates to be higher. He stated that an interesting phenomenon that currently exists in the market is that one sees an abnormally steep yield curve.
Mr. Patterson stated that, on the short-term end, rates are much lower than they typically are, in relation to long-term rates. He stated that, over the last few weeks, they have seen some increase in short-term rates, with long-term rates staying relatively constant, using a flattening of the yield curve, to what one has typically seen in the past. He stated that it is hard to say what short-term rates will do in the future.
Commr. Swartz stated that the Board is faced with the fact that, if the County stays with a system that collects revenue through tipping fees, which he noted is the system that is in place at the present time, there will be added costs to the users of the system, even if the County stays with a tipping fee, and, if the County changes to a system that charges on a per residential unit basis, then that will also have some consequences to the users of the system.
Mr. Hiney, Recycling Coordinator, reappeared before the Board and reviewed the two charts (Generation Basis and Per/Unit Basis) which Commr. Swartz had earlier requested him to refigure and bring back. He stated that the new figures pertained to costs involved if the County maintained the current system of allocation for disposal, based on the following four categories - drop-off centers, individual accounts, collectively negotiated and bargained accounts, and a containerized service (use of a dumpster rather than hand collecting), which he noted are the four different groups that the Board would be looking at.
A brief discussion occurred.
The Chairman opened the public hearing.
Mr. Phil McClendon, a member of the Solid Waste Committee, appeared before the Board stating that the Committee tried to make it equitable for the County, recognizing that some people's rates would go up and some would come down. He stated that the Committee
felt very strongly, from the beginning, that tipping fees were not the way to go, because they varied too much and that, if the County went into recycling, the tipping fees were going to vary even more. He stated that some members of the Committee feel that the County is overpaying for disposal, due to composting and recycling. He stated the Committee feels that, if the County went to a unit cost, it would spread the cost of disposal equally over all the taxpayers in the unincorporated areas of the County, as a non-ad valorem assessment, therefore, their recommendation is, very strongly, that the County go with a non-ad valorem assessment.
Mr. Bob Murphy, a local resident, appeared before the Board and questioned how many residents fall into the four categories alluded to earlier, to which Commr. Swartz responded, giving a rough breakdown of said numbers.
Mr. Bob Neuman, the owner of a mobile home park in Leesburg, appeared before the Board and questioned the numbers contained in the chart that Mr. Hiney reviewed.
Discussion occurred regarding said numbers, at which time Mr. Neuman stated that he is presently paying $168.14 per month for collection and disposal, however, according to the numbers given on the chart, indicated that those fees will more than double. He also stated that he feels the system being discussed is not fair, as it is not based on the garbage that is produced. He stated that it penalizes people for not producing more garbage than they do and he does not feel that there is anything fair about that.
Mr. L. G. Simpson, the owner of a local mobile home park, appeared before the Board stating that his purpose for being present at this meeting was to discuss the issue of tipping fees versus non-ad valorem assessments. He stated that, if the County gets the money up front, it is to their advantage, but it is difficult for the small businessman to come up with such a large sum of money at one time. He requested the Board to consider the
option of allowing those people to pay said fees on a monthly basis.
Mr. John Gammon, a local resident, appeared before the Board stating that when Commr. Swartz listed the amount of people for each category, he did not list the amount of people for No. 4 (containerized), to which Commr. Swartz responded that he had combined curbside and containerized into a collectively negotiated amount. He stated that the total is 8,500, with the number for curbside being 2,500 and the number for containerized being 6,000.
Mr. Don Fenstermacher, a local resident, appeared before the Board stating that he lives in a mobile home park and is presently paying $150 per year for twice a week collection. He stated that he recycles, yet pays the same amount of money for collection as the individual who does not recycle and did not feel that this was fair.
Mr. Russ Bayse, a resident of Hawthorne at Leesburg, appeared before the Board stating that he feels residents should only have to pay for garbage that they produce. He stated that the residents of Hawthorne do not want special favors, they just want to be treated fairly.
Ms. Josephine Evaler, a resident of Hawthorne at Leesburg, appeared before the Board and questioned whether the figure of $44.66, contained in the chart which Mr. Hiney reviewed, under the category of Collectively Charged Residential, was the projected figure for this year, to which Commr. Swartz replied that it was. He stated that, based on using tipping fees with the new budget, if the Board did not change anything, the cost of paying for disposal in the category she alluded to would go from $34.27 to $44.66.
Mr. Dan Gordon, Manager, Hawthorne at Leesburg, appeared before the Board and questioned the disposal costs listed on the charts that Mr. Hiney reviewed. He stated that he was concerned about the fact that the Board was reducing, substantially, the amount that approximately 80% of the households are paying and
increasing, substantially, what approximately 20% of households are paying, noting that it appeared to him that the Board was reducing the total revenue collected, to which Commr. Swartz replied that that was not the case. He then explained how it would work.
Mr. Gordon stated that a lot of the costs being discussed are not costs that the County is now incurring, due to the fact that the County is not in the garbage collection business, other than drop-offs, and felt that that needed to be clarified. He stated that he felt it was clear, from the numbers that Mr. Hiney prepared, that it would be in the best interest of those people who live in mobile home parks, for the County to stay on the tipping fee system, even if the fees were to go up.
Mr. Dan Eastwood, a resident of Tavares and member of the Ad Hoc Financing Advisory Committee, appeared before the Board and requested them to accept Ms. Lehman's recommendation to stay variable, if the Letter of Credit is available, particularly for the next two years. He recommended that the Board aggressively pursue the Letter of Credit renewal, which PFM's study indicated, giving the people of the County a savings over the next two years. He stated that, as Commr. Hanson pointed out, no one has suggested that the County stay variable for 20 years. He stated that his recommendation would be to look strongly at staying in the variable rate mode, in order to enjoy the present debt service of $22.00 per ton, or 2.3% interest rate, as compared to the jump of a 6.6% or 7% interest rate.
Mr. Eastwood stated that all the studies he has seen show that the savings on the fixed rate occur after the year 2013 and feels it is very important that the Board understand that. He stated that when one talks about present value savings, one has to look at when they occur. He stated that the prudent decision would be to look at the fact that a variable rate mode is far more attractive in today's market, noting that the U.S. Treasury has decided that. He referred to a memo from Sun Bank which states that the U.S.
Treasury's decision to seek short term bonds is two-fold, a savings in interest payments and a reduction in long-term rates. He stated that one is going to see short-term rates go up, but on the other hand long-term rates may come down a little.
Mr. Eastwood stated that when the Ad Hoc Financing Advisory Committee was formed, the members assumed that the County could go out and buy bond insurance to replace the Letter of Credit, however, found out, through the efforts of PFM, that that is not possible, noting that it is not possible because of the quality of the credit and the unfortunate quality of all solid waste projects in the Country, particularly in the State of Florida, because of flow control. He stated that because of litigation that is ongoing in that area, it precludes the County from buying bond insurance, therefore, the citizens of the County are going to have to pay the higher price, if the County goes to a fixed rate. He recommended that the Board look back over the last three years and see how much money the County has saved, before making a decision. He stated that he hoped the Board would not convert the bonds for at least the next two years.
Mr. Andy Warner, Manager of the Shangri-La by the Lake Mobile Home Park, appeared before the Board and questioned what the park's disposal costs will be, to which Commr. Swartz responded, stating that it will depend on what the Board decides, noting that if the Board decides to stay with a tipping fee based revenue system, he would pay based on a tipping fee, at the County facility. If the Board chooses to go with a unit based system, then he would pay based on the number of units in the park.
Mr. O. R. Wilson, a local resident, appeared before the Board and questioned whether the Board was mandating that collection be year round, or whether that would be a separate item altogether, to which Commr. Swartz responded that the system the Board has, thus far, approved is a voluntary collection system. He then explained how it would work.
There being no further individuals who wished to address the Board, the Chairman closed the public hearing.
A motion was made by Commr. Bailey and seconded by Commr. Gerber to direct staff to send out an RFP (Request for Proposal), using County staff and whatever other resources are necessary to provide a line of credit for any infrastructure sales tax that will be funded.
Under discussion, Commr. Cadwell stated that the Board needed to keep in mind that they were limiting other things that the County could do with the infrastructure sales tax money that is coming out of the pot.
The Chairman called for a vote on the motion, which was carried unanimously.
On a motion by Commr. Gerber, seconded by Commr. Bailey and carried unanimously, the Board approved to use the modified hauler collected special assessment, with a credit program.
Discussion occurred regarding whether the Board should proceed to a fixed rate financing, for the bond, within the parameters that PFM has set for the County, or whether to remain in the variable rate mode, over a short term, and renew the Letter of Credit in some fashion, at which time Mr. Kyle Garritt, Ogden Martin, appeared before the Board and answered questions regarding the projections that were noted, as far as the cost of a service fee next year.
Discussion continued, at which time Commr. Cadwell stated that he felt the Board should consider converting to a fixed rate, using the parameters recommended by PFM.
Commr. Bailey stated that the fixed rate is the lowest that he feels it will ever be again, therefore, was more comfortable with going to a fixed rate than staying in the variable rate mode.
Commr. Gerber questioned the flexibility of staying in the variable rate mode. She questioned whether the County would be able to convert to a fixed rate, in six months, or whether the
County would be locked in for two years, if the Board chose to stay in the variable rate mode, to which Mr. Patterson responded that, if the County decided to remain in the variable rate mode, it would always have the opportunity in the future to fix the rate on the debt.
Commr. Swartz stated that he would support staying in the variable rate mode, but setting a rate that may be above the 5.25%, to insure that the County has additional revenue and can pay down the taxable bonds that are at the higher rate.
Commr. Hanson stated that she felt one of the most important things the Board needed to look at was stability for the solid waste system, noting that she has not seen it since she has been on the Board. She stated that she felt the same about the variable rate, noting that she does not think the County is going to see it in the near future. She noted a concern she has of rates rising in the next few years and a concern that the County is not going to be able to change gears when it happens. She stated that she felt the risk was too great to take, therefore, was going to go with the recommendation of staff and PFM.
A motion was made by Commr. Cadwell and seconded by Commr. Hanson to go to a fixed rate, within the parameters that PFM set for the Board.
Under discussion, Commr. Hanson stated that the County has benefitted in the last few years, based on the fact that the bonds were in a variable rate mode, however, noted that she felt the County had been very, very lucky and that it was very risky to go much further with it.
The Chairman called for a vote on the motion, which was carried.
Commrs. Swartz and Gerber voted "No".
Concerning the method by which the County would calculate disposal costs, Commr. Swartz suggested that the Board look at Scenario IV (b), under Tab 7, in the booklet provided by staff,
noting that said figures would be the closest approximation of where it will be. He stated that the difference would be where the Board would want to allocate the costs.
Discussion occurred regarding the issue, at which time Mr. Hiney indicated what the future costs would be, if the County stayed in a tipping fee basis. He stated that the Board was down to the choice of determining which way they wanted to go - tipping fee versus per unit costs.
Commr. Cadwell stated that he felt the most fair way would be to go with the per unit costs, to which Commr. Swartz concurred.
A motion was made by Commr. Cadwell and seconded by Commr. Hanson to go with the per unit costs system, for disposal, and to further define the solid waste budget.
Upon being questioned as to how much time the Board had to work with staff and make sure that the County is spending the money that it wants to, where it has to, and if it wants to do anything different, Ms. Martin replied that time was very short. She stated that the packet would have to be together within three to four weeks.
The Chairman called for a vote on the motion, which was carried unanimously.
Mr. Wahl, County Manager, informed the Board that they needed to give staff authorization to use infrastructure sales tax funds for solid waste capital expenditures, specifically for the liner for Astatula, Phase II B.
On a motion by Commr. Gerber, seconded by Commr. Bailey and carried unanimously, the Board approved a request from the County Manager that staff be authorized to use infrastructure sales tax funds for solid waste capital expenditures, for the liner for Astatula, Phase II B.
There being no further business to be brought to the attention of the Board, the meeting was adjourned at 1:30 p.m.
G. RICHARD SWARTZ, JR., CHAIRMAN
JAMES C. WATKINS, CLERK